Exponential Interactive, digital advertising specialist, has launched a new pricing model for online video ads to help advertisers and publishers to make it easier to buy and sell video advertising.
Called CPME, it’s a hybrid model combining the best of the current CPM (cost per thousand) and CPE (cost per engagement) pricing models. CPME works by charging a CPM price for the number of views of the video ad but then automatically moving to a CPE model if people engage with the ad in some way, such as rolling over an ad to expand it, clicking to the advertiser website or playing a game.
“This model is about combing the best of both worlds by automatically valuing each ad exposure correctly, whether it’s a passive impression or an active engagement,” says Doug Conely, Exponential’s chief strategy officer in a press statement. “Valuing it in this way encourages greater investment in the ad teaser experience itself so it’s optimised for the right people. At the same time, it places a value on the engagement, ensuring that ad quality is not sacrificed for quantity.”
For example, if 1,000 people view the ad and 100 go onto engage with the ad, the advertiser would be charged a CPM for the 900 views and a CPE for the 100 engagements.
“Highly engaging video teasers will skew towards fewer impressions, whilst those more appropriate for broad awareness will be optimized without forcing engagement rates,” says Conely. “This should protect advertisers from unreasonably high effective CPMs that could result from otherwise successful CPE campaigns with high engagement rates. Additionally, agencies will be able to scale and optimise campaigns between display, in-stream and mobile more easily.”
The CPME model has been brought in to address the issues of the two pricing models, which both have their strengths, but are potentially stifling creativity and advances in targeting technology. For instance, CPM pricing ignores the value of engagement, whilst CPE pricing doesn’t focus on finding the right audience initially.
“As the digital landscape and our clients’ business needs evolve, so too does our service offering. This new model will ensure that marketers continue to generate results whilst maintaining efficiency. As what is in effect the second largest ad network in the region, we are pleased to be bringing this new approach to the Middle Eastern market,” says Amer Attyeh, Exponential’s regional business head for MENA.